There have been several pieces of Federal legislation to address the impact of COVID-19 that have been enacted in the past few weeks. Because these have been enacted quickly and the provisions are being clarified as they are implemented we wanted to provide a quick overview of two key provisions and links to some resources. The following resources below are key programs to provide financing for small businesses that have been impacted by COVID-19.
The CARES Act, Paycheck Protection Program (PPP) – The PPP is a $350B program administered by the Small Business Administration to provide loans to businesses with fewer than 500 employees. PPP loan amounts are capped at $10M, have no collateral requirement, and amounts used for certain payroll, rent or mortgage, and utility expenses before June 30th are eligible for debt forgiveness.
The CARES Act, Economic Injury Disaster Loans (EIDL) – The EIDL program is an SBA loan program designed for small businesses that have been impacted by COVID-19 with demonstrated financial need. These loans are for amounts up to $2M and applications are made directly to the SBA.
Our friends at Sherman & Howard have put together a great side by side comparison of the PPP and EIDL programs so that business owners can make an easy comparison to see which one may be the best fit for them. There is also a Small Business Owners Guide to the CARES Act provided by the Senate Committee on Small Business & Entrepreneurship that has some good information on the programs available.
We would recommend that you reach out to your CPA for a deeper dive on your needs and the programs available but please don’t hesitate to reach out if we can help you walk through your options as well.